Daniel Andrews has fronted the media on Wednesday to publicly defend his government’s “challenging” budget amid backlash over tax hikes.
The Premier was accused earlier in the day of going into “hiding” after failing to appear for an interview with the Today show.
Victoria’s 2023-24 budget was handed down on Tuesday, revealing the government’s focus on tackling the mounting debt generated during the Covid-19 pandemic.
There has been rising criticism from Victorians over new Covid debt levies set to hit big businesses and landlords the hardest.
“I fully acknowledge that there were some very difficult decisions that had to be made in this budget, and I’m not about kicking things down the road,” Mr Andrews said.
“I’m not here to be popular.”
The Premier defended his plan to pay back pandemic-era emergency borrowings and said paying down the debt accrued during the Covid-19 outbreak was the “right thing” to do.
“Whilst our kids will remember Covid, I will not ask them to pay for it,” he said.
“It was money that was spent, it’s gone – it’s not making the economy bigger, it’s not adding to productive capacity … it was emergency funding.
“It was essential then, and equally, it’s essential that we pay it back now.”
Andrews said his government had a “clear growth strategy” that would deliver on election commitments, while Covid-era debts would be paid off over a 10-year plan.
“There is borrowing that you simply have no choice but to make to get through the toughest of times, and that’s exactly what we did,” he said.
“The choice that we have made is to pay off the Covid credit card with regard to people’s capacity to pay, and the alternative is to cut hospitals and schools and we simply won’t do that.”
Mr Andrews also defended his decision to impose “modest additional charges” for Victorians who own multiple properties.
Under the new Covid debt levies, those with more than one property will pay a minimum $5000 over the next decade as well as a $500 annual tax for investment properties with a land value between $50,000 and $100,000.
The payment will increase to $975 for homes valued between $100,000 and $300,000, while an extra 0.1 per cent of the land value will be applied to properties worth more than $300,000.
Land tax thresholds have also been lowered from $300,000 to $50,000, excluding the family home.
Mr Andrews also revealed there would be some “very significant statements” made on the housing crisis, particularly housing supply, in a couple of months.
It was also revealed that existing payroll tax exemptions for the top 15 per cent of non-government schools by fee level would be removed.
Around 110 schools will be affected by the changes coming into effect in 2024-25, while the measure is estimated to contribute nearly $135m towards budget repair.
“They’ve had a sweetheart taxation deal and we cannot afford to continue that,” Mr Andrews said.
“They are very high fee elite schools, and therefore they’re in a very different position, and they have now a tax treatment that recognises their profitability.”
Businesses with a national payroll of more than $10m will pay an additional payroll tax of 0.5 per cent or 1 per cent if their national payroll exceeds $100m.
The government also pledged a $200m transition package for the native timber logging industry that will include support for workers and their families as the practice is phased out.
“A number of judgments have been handed down by judges, not by the government, and we’ve got a plan to exit native timber harvesting at the end of this decade,” Andrews said.
“We’re going to wrap support around each of those workers and their families.
“We made it very clear that there would be a number of difficult choices that we made in the budget.”
Today host Sarah Abo said earlier on Wednesday that Mr Andrews had been invited to appear on the show this week, but he was “unavailable”.
She instead spoke with Melbourne 3AW presenter Neil Mitchell and Teal independent Monique Ryan about the budget fallout, the former accusing Mr Andrews of “hiding”.
“Daniel’s unavailable. Who would’ve thought? They’re hiding at the moment and so they should,” Mitchell said.
“Look, remember we closed the borders during Covid. I think we have to do it again to stop people leaving Victoria. Business will go.
“Why would you open a major business in Victoria when you’re going to pay extra payroll tax?”
The 3AW presenter said suggestions that the debt was racked up during the pandemic were “nonsense”, as every other state “went through Covid as well”.
“Democracy failed,” he said.
“They wouldn’t even discuss it six months ago before the election when they should have discussed it, neither would the opposition – they wear it as well.”
While handing down the budget on Tuesday, Treasurer Tim Pallas described it as “the most difficult budget that I’ve had to frame”.
Ms Ryan said Victorians had been through a “difficult” three years during the pandemic and the significant debt that the government had accumulated would be a “real challenge” for everyone.
“I think all aspects of government spending need to be looked at and brought into account,” she said.
Ms Ryan called into question the cost-effectiveness of infrastructure spending across the state and said the cost burden shouldn’t fall on small businesses and families.
“There is a huge amount of infrastructure spending going on in Victoria at this point,” she said.
“Cost of living pressures are hitting deep for everybody.
“I think it’s a very challenging budget for us all.”
The budget’s levies were introduced in a bid to help pay down $30bn of Covid debt by 2033 when the levies are due to end.